Keynes Has Given Us a System of Economics Which Is Based on the Assumption That No Real Scarcity Exists

Now such a situation, in which abundant unused reserves of all kinds of resources, including all intermediate products, exist, may occasionally prevail in the depths of a depression. But it is certainly  not a normal position on which a theory claiming general applicability could be based. Yet it is some such world as this which is treated in Mr. Keynes' General Theory of Employment, Interest and Money, which in recent years has created so much stir and confusion among economists and even the wider public. Although the technocrats, and other believers in the unbounded productive capacity of our economic system, do not yet appear to have realised it, what he has given us is really that economics of abundance for which they have been clamouring so long. Or rather, he has given us a system of economics which is based on the assumption that no real scarcity exists, and that the only scarcity with which we need concern ourselves is the artificial scarcity created by the determination of people not to sell their services and products below certain arbitrarily fixed prices. These prices are in no way explained, but are simply assumed to remain at their historically given level, except at rare intervals when "full employment" is approached and the different goods begin successively to become scarce and to rise in price.

--Friedrich A. Hayek, The Pure Theory of Capital (1941; repr., Auburn, AL: Ludwig von Mises Institute, 2009), 373-374.

An Inappropriate Simplification: Introducing the Time Factor into the Theory of Capital in the Form of the Average Period of Production

I had little idea that this task of systematisation would uncover serious gaps in the reasoning which had yet to be bridged, and that some of the simplifications employed by the earlier writers had such far-reaching consequences as to make their conceptual tools almost useless in the analysis of more complicated situations. The most important of these inappropriate simplifications, of the dangers of which I became aware at a comparatively early stage, was the attempt to introduce the time factor into the theory of capital in the form of one single relevant time interval -- the "average period of production". But it gradually became clear that this supposed simplification evaded so many essential problems that the attempt to replace it by a more adequate treatment of the time factor raised a host of new questions which had never been really considered and to which answers had to be found.

--Friedrich A. Hayek, preface to The Pure Theory of Capital (1941; repr., Auburn, AL: Ludwig von Mises Institute, 2009), vi.